DekelOil Public Limited, operator and 51% owner of the vertically integrated Ayenouan palm oil project in Côte d’Ivoire, has told DIrectorsTalk that it has signed an agreement with a local smallholder, which owns approximately 1,000 ha of mature estates, for the supply of fresh fruit bunches (‘FFB’) for processing at the Company’s 60 t/hr crude palm oil (‘CPO’) extraction Mill, which is one of West Africa’s largest.
Under the terms of the agreement, the smallholder will supply FFB to DekelOil for the six months to June 2016. The smallholder has requested that 50% of the consideration be received through the issue of new ordinary shares in the Company at a price of 1.52p per share (13 CFA Franc at a £: CFA Franc rate of 852), a 38% premium to the closing price of 1.10 pence on 21 January 2016. The issue of shares in settlement of the supply of FFBs is subject to a minimum stock settlement equivalent to £117,000 (100,000,000 CFA Franc) and a cap of £235,000 (200,000,000 CFA Franc) in stock.
This agreement is in line with the Company’s strategy to increase CPO production towards the Mill’s 70,000 tonnes per annum capacity. As announced on 6 January 2016, CPO production at the Mill increased by 151% to 35,770 tonnes for the year ended 31 December 2015.
DekelOil Executive Director Lincoln Moore said, “We view the smallholder’s request to be partially paid in shares of DekelOil priced at a premium to the current market price as a strong endorsement of our Company and its near term valuation potential and we look forward to building a long term relationship with the smallholder as a fellow shareholder and supply partner.”
